Some commodities, particularly gold, do well in times of financial crisis. Lehman Brothers’ bankruptcy collapse five years ago was certainly a crisis to remember – and gold certainly has done well since.

“It is important to note how the Lehman bankruptcy and subsequent systemic, financial and economic crises showed gold’s importance as a safe-haven asset and as financial insurance in a portfolio,” Mark O’Byrne, executive editor at GoldCore in Dublin, wrote in a blog Friday.

Fears of Fed tapering and a Chinese credit crunch have sent gold and copper plunging to multi-year lows in recent sessions, and it’s probably not the best time to be a bargain hunter when it comes to either metal, commodities trader Dennis Gartman told CNBC.

If copper’s a good indicator for economic trends and equity markets, then it may be sending investors a warning of bad things to come.

Prices for copper futures saw a big rally on Friday, but that doesn’t make up for its year-to-date loss. The July copper contract
/quotes/zigman/678445HGN3 settled at $X a pound on Comex, up X, or X%, for the session. It’s still trading down more than 10% for the year.

Copper, which is also known as “Dr. Copper” because of its ability to serve as an indicator, is “leading the way downward,” Albert Edwards, a strategist at Societe Generale, told clients in a research note dated Thursday.

Traders have been looking to China to provide a boost to demand for industrial commodities, but economic data point to a continued slow recovery in the nation’s economy, according to a note from Capital Economics on Friday.

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Qingdao city in China

February trade data from China “could be spun either positively or negatively, depending whether the focus is on exports or imports,” said Julian Jessop, Capital Economics’ head of commodities research.

However, the import data “more obviously reflect the strength of demand within China itself, and these were weak,” he said, and the weakness has been led by substantial declines in imports of key commodities.

Skepticism over the so-called “super-cycle” in commodities has now gone mainstream, according to an analyst at Capital Economics, but it’s not time to give up on all of them.

“It has taken two years of dismal returns and a regulatory backlash, but the consensus has finally swung round to our long-held skepticism about the ‘super-cycle’ and the diversification benefits of investing in commodities,” said Julian Jessop, head of commodities research at Capital Economics.

But while he expects renewed weakness in prices of key commodities such as crude oil and copper in the second half of the year, Jessop also said there are plenty of other commodities “for which the underlying fundamentals are positive.”

Analysts at Deutsche Bank singled out copper and lead as their top picks among industrial metals leading up to the Chinese New Year.

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In two weeks, the Chinese will be celebrating the Year of the Snake. A snake has none of its negative Western connotations, and the year is meant “for steady progress and attention to detail,” according to HanBan, or the Chinese National Office for Teaching Chinese as a Foreign Language.

That’s particularly fitting given that markets may see “some increase in activity as investors gauge the potential for demand growth from the country into the seasonally strong spring period,” the Deutsche Bank analysts said. Key drivers are likely corporate and infrastructure investments, “which should prove positive for raw materials demand,” they said. Some inflation risks could lead to policy tightening by year-end, however. Deutsche Bank economists forecast gross domestic product growth of 8% in the first six months of this year, and 8.5% in the second half, for from the heady growth of a few years back but still respectable.

Analysts had a lot to say on Friday about the recent developments in the metals market and the outlook for metals prices. Here’s the run down:

PRECIOUS METALS

Prices for gold
/quotes/zigman/4331913GCG3 and platinum group metals “should rise further due to the revival of safe-haven demand and production cuts, respectively,” said Ross Strachan, economist at Capital Economics, in a research note. This year, “we expect precious metals to outperform industrial metals as gold benefits from safe-haven demand and the industrial recovery falters.”

Moody’s Investors Service believes that demand and price expectations for the global base-metals industry – mainly aluminum, copper, nickel and zinc — will remain “muted” over the next 12 to 18 months, and said in a report that its outlook for the industry is still negative.

Freeport-McMoRan

Copper mine in Peru

“Recession in Europe, sluggish economic growth and anxiety about the fiscal cliff in the U.S., and slower growth in China all weigh on the industry as we head into the new year,” said Carol Cowan, Moody’s vice president and author of the report, Base Metals Industry Faces Challenging Road in 2013. “China is a key driver of metal consumption and its appetite for metals remains the wild card in the direction of metal prices in 2013.”

For nickel and aluminum, financing transactions will continue to mask weak underlying supply and demand fundamentals near term, while copper is best positioned among base metals because of its more favorable supply and demand characteristics, the Moody’s report said.

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